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City of Berkeley vs. big soda

Robert Reich, professor of public policy | September 9, 2014

I was phoned the other night in middle of dinner by an earnest young man named Spencer, who said he was doing a survey.

Rather than hang up I agreed to answer his questions. He asked me if I knew a soda tax would be on the ballot in Berkeley in November (as Measure D). When I said yes, he then asked whether I trusted the Berkeley city government to spend the revenues wisely.

At that moment I recognized a classic “push poll,” which is part of a paid political campaign.

So I asked Spencer a couple of questions of my own. Who was financing his survey? “Americans for Food and Beverage Choice,” he answered. Who was financing this group? “The American Beverage Association,” he said.

Spencer was so eager to get off the phone I didn’t get to ask him my third question: Who’s financing the American Beverage Association? It didn’t matter. I knew the answer: Pepsico and Coca Cola.

Welcome to Berkeley, California: Ground Zero in the Soda Wars.

Fifty years ago this month, Berkeley was the epicenter of the Free Speech Movement. Now, Berkeley is moving against Big Soda.

The new movement isn’t nearly dramatic or idealistic as the old one, but the odds of victory were probably better 50 years ago. The Free Speech Movement didn’t challenge the profitability of a one of the nation’s most powerful industries.

Sugary drinks are blamed for increasing the rates of chronic disease and obesity in America. Yet efforts to reduce their consumption through taxes or other measures have gone nowhere. The beverage industry has spent millions defeating them.

If on Nov. 4 a majority of Berkeley voters say yes to a one-cent-per-fluid-ounce tax on distributors of sugary drinks, Berkeley could be the first city in the nation to pass a soda tax. (San Franciscans will be voting on a 2-cent per ounce proposal requiring two-thirds of them approve; Berkeley needs a mere majority.)

But if a soda tax can’t pass in the most progressive city in America, it can’t pass anywhere. Big Soda knows that, which is why it’s determined to kill it here.

Taxing a product to reduce its consumption has been effective with cigarettes. According to the American Cancer Society, every 10 percent increase in the cost of a pack of cigarettes has caused a 4 percent decline in the rate of smoking.

And for years cigarette manufacturers waged an all-ought war to prevent any tax or regulation. They eventually lost, and today it’s hard to find anyone who proudly smokes.

Maybe that’s the way the Soda Wars will end, too. Consumption of sugary soft drinks is already down somewhat from what it was ten years ago, but kids (and many adults) are still guzzling it.

Berkeley’s Soda War pits a group of community organizations, city and school district officials, and other individuals (full disclosure: I’m one of them) against Big Soda’s own “grassroots” group, describing itself as “a coalition of citizens, local businesses, and community organizations” without identifying its members.

Even though a Field Research poll released in February found 67 percent of California voters (and presumably a similar percentage of Berkeley voters) favor a soda tax if revenues are spent on healthy initiatives, it will be an uphill fight.

Since 2009, some thirty special taxes on sugary drinks have been introduced in various states and cities, but none has passed. Not even California’s legislature, with Democratic majorities in both houses, could enact a proposal putting warning labels on sodas.

Even New York City’s former and formidable mayor Michael Bloomberg – no slouch when it came to organizing – lost to Big Soda. He wanted to limit the size of sugary drinks sold in restaurants and other venues to16 ounces.

But the beverage industry waged a heavy marketing campaign against the proposal, including ads featuring the Statue of Liberty holding up a giant soda instead of a torch. It also fought it through the courts. Finally the state’s highest court ruled that the city’s Board of Health overstepped its authority by imposing the cap.

Fifty years ago, Berkeley’s Free Speech Movement captured the nation’s attention and imagination. It signaled a fundamental shift in the attitudes of young Americans toward older forms of authority.

Times have changed. Four years ago the Supreme Court decided corporations were people under the First Amendment, entitled to their own freedom of speech. Since then, Big Soda has poured a fortune into defeating ballot initiatives to tax or regulate sugared drinks.

But have times changed all that much? In its battle with Big Soda, Berkeley may once again make history.

Cross-posted from Robert Reich’s blog.

Comments to “City of Berkeley vs. big soda

  1. Why Higher Taxes on Sugary Foods Don’t Work
    http://www.huffingtonpost.ca/patrick-luciani/sugar-tax_b_5879266.html

    excerpt:

    And of course there was a study called the “Australian Paradox”, from the University of Sydney that suggests sugar may not be the culprit we think it is when it comes to rising obesity levels. The study covers the period from 1980 to 2003 when the level of obesity increased threefold in Australia while consumption of refined sucrose declined by 23 per cent.

    This didn’t sit well with the anti-sugar crowd. The authors were accused of deliberately falsifying the data, causing harm through their reckless disregard for public health and benefiting financially from their conduct. These were serious accusations. The University of Sydney set up an independent review that took six months to complete. The 89-page review completely exonerated the authors.

    What these many studies show is that the causes of obesity are highly complex and immune to simplistic and poorly designed public policies. In most cases, such policies end up doing more harm than good.

  2. “The political arm of the American Beverage Association donated $500,000 on Sept. 16 to fight a proposed tax on sugary beverages in Berkeley, bringing to $800,000 the amount of money it has poured into the No on Measure D campaign,” Berkeleyside reported this week. The contribution “appears to be the single largest in Berkeley history.”

    Your thoughts on this? Does it affect how you’d vote?

    • Why would it? I support campaign finance reforms, publicly funded elections and the repeal of Citizens United. Anyone following the soda wars in national news should not be the least surprised that the ABA is committed $$$ to fighting these controversial Fat Taxes. I think the public health activists have done damage to their brand by overstating the science, singling out Soda, and downplaying the role of over-consumption/inactivity in metabolic disorders.

      Politico’s coverage of the SF/Berkeley campaigns provides better context than the Bside story. Contrary to Reich’s assertion Berkeley is NOT leading, the 2 bay area fat taxes are the Last Stand in the Soda Wars.

      ABA has won about 30 campaigns nationally. The YES campaign continues to mislead claiming the tax will discourage consumption by raising the price of the product. When in fact retailers determine pricing and how to recover the cost of this sin tax. Soda may or may not cost more.

      The corner store exemption is just as problematic. The Yes campaign claims that the tax will save minority youth whose obesity rates outpaced whites. Anyone familiar with the flatlands (not Reich) knows that corner stores are where youth purchase soda, chips, candy every day. Measure D is just another cynical attempt to raise revenue by the City Council who is running out of options, having tapped out homeowners and refuses to live within its means.

      Berkeley’s measure is even more poorly structured than Sen Monning’s statewide fat tax last year which died a proper death. NO on D.

      “Californians’ obesity is costing the state an estimated $21 billion a year in health care and other expenses. But Carmel Sen. Bill Monning’s proposed solution, a soda tax, has two big, fat problems.”

      Read an Oakland Tribune editorial on the subject here.

  3. So what if soda is a scapegoat? It is just one of many possible symbols for our health epidemic. Why not choose soda? We have to pick our battles one at a time.

    Taxing individuals is hardly penalizing. Rather it supports our society in turning away from sugar drugs. At first this movement may seem paternalist and maybe even punitive to some. In the long term, the idea is to stop normalizing addictive and harmful “foods.” It isn’t about controlling, or even about collecting tax revenue for one purpose or another. This is about changing global attitudes toward what dangerous things we put in our mouths and in the mouths of our children.

    The issue here is not just about obesity. It is also about the drug-like nature of sugar, which causes not only health problems but also emotional problems for those who are suffering from addictive behaviors. And a note about food choices of the poor: sugar does not give sustenance, in fact it only triggers more hunger.

  4. Many have suggested that big soda is paying people to comment on news articles and blog posts about this issue. I have to suspect that it is true, when I see all the comments here that just repeat the standard industry talking points.

    Most of these talking points are absolutely absurd. For example, a commenter claims that we should not support this tax because soda is not the only cause of obesity. This is like saying that we should not support a law controlling air pollution because it is not the only form of pollution.

    Yet I have heard this absurd comment over and over again, which makes it seem that people are following a list of talking points that someone has given them.

  5. I honestly long for the change that this measure seeks to create, but I think the apathy that government interference creates is a troublesome price to pay. The philosophical perspective that holds that people are too stupid or too lazy to change, that informs the outlook of this measure, is a counterproductive perspective. By seeing the world as the collection of its flaws, we are unconsciously involved in the creation of just such a reality. When we don’t trust people enough to change we encourage the very apathetic mindset that we most fear and that creates many problems in the first place.

    “The Christian resolution to find the world ugly and bad has made the world ugly and bad.” ~ Nietzsche

    It’s not really a Christian thing though. George Carlin anyone? “Think of how stupid the average person is, and realize half of them are stupider than that.” ~ George

    Interestingly what Nietzsche observed and can still today be observed to be a Christian mindset held by liberals alike. The more difficult task of cultural change that is really needed is deeper and more far reaching than any governmental “encouragement” can ever accomplish. The change is needed but this measure won’t accomplish a true change.

    What is more disturbing is the 20 billion annually in corn subsidies making the soda cheaper (read more here). The funds for the “solution” are currently there but are being used to fund the “problem”. How’s that?

  6. Rosa, Have you considered teaching your kids that advertisers lie, just like political campaigns. My two adult sons made it through children soda free. My oldest is a metabolic biologist in a nutrition lab at CAL.

    With soda consumption declining substantially over the last decade, we should turn our attention to the real culprit, high-fructose corn syrup. The fact that the Berkeley tax exempts corner stores and small markets underscores what a farce this tax is. This is just another slush fund from a city government that after a decade of fighting for a sunshine ordinance still does not honor transparency.

    No on D. Poorly designed legislation, dubious science, unaccountable government.

    No, I am not a shill for Big Soda. I am a parent from south Berkeley who volunteered to teach cooking in elementary classes long before Alice Waters brought her Big Repudiation and $$$ in.

  7. The first question was never answered, Do you trust the Berkeley city government to spend the revenues wisely?

    The government will always try to modify what you do and what you think. This is just another way to help us become a better person through through government mandated policies.

    Mike

    • “This is just another way to help us become a better person through through government mandated policies.”

      Like public education, taxes on tobacco, and taxes on alcohol. Are you also against all of those things?

  8. One thing I like about this situation is the way Big Soda’s propagandists are using the comparison to smoking to their advantage — by pointing out that smoking directly harms those who are not choosing to do it (via secondhand smoke) and is therefore much worse than drinking soda, they are helping spread the news that smoking is directly harmful to those who are not choosing to do it.

    This message needs to be repeated as often as possible: Smoking is bad for the health of people who aren’t smokers but are made to smoke involuntarily, and therefore smoking should continue to be regulated closely and sanctioned wherever people are breathing.

    It’s too bad that we need big interests to counter other big interests — Pharma vs. Tobacco, Insurance vs. Tobacco, Soda vs. Tobacco, and so on, but at least it has the potential to move us in the right direction, which is away from Tobacco.

    On the Soda subject specifically, I don’t have too much sympathy for a highly profitable industry that worries about being not quite as profitable as it might be if it could continue to avoid the external costs of consuming its products. Same applies to funding roadways and bridges with gas taxes!

  9. I’m usually on board with what Reich says, and grateful that he has the will (and means) to say it. But this column casts some unfortunate aspersions on the idea that he is reasonably weighing the facts of each issue rather than, out of enthusiasm or some perceived pragmatic need, simply endorsing the default left-of-center position.

    The fact that Big Soda has attempted to undermine Measure D has, in and of itself, no bearing on whether the measure is well-founded.

    There is, firstly, the issue of whether the implementation of any sort of “sin tax” is legitimate. Though Reich and others can point towards some (not necessarily complete, beyond-the-shadow-of-a-doubt causal) correlations between the taxation of cigarettes and reduction in smoking, how far we want to go with advocating this sort of forced fix in general is not an easy question.

    Setting that aside, the money from Measure D goes into the city’s general fund—not towards any program specifically geared towards nutrition education or recreation programs.

    Is this the kind of armchair, fiscally irresponsible “activism” Berkeley wants to support? If this passes, I’m afraid the answer may be yes.

  10. I have a lot of respect for Prof. Reich, but I think he’s way off on this one. The points made by the poster D.D. above are spot on. The analogy between sugary drinks and cigarettes is quite misleading; there is nothing inherently unhealthy about a can of soda. The detrimental effects to health come upon excessive consumption of soda; but many other foods fit that description – fatty food, fried food, red meat, even salt!

    So should we also tax butter, cane sugar, salt, candy, chips, …? Clearly this line of action does not make much sense. If as a society we want to disincentivize soda consumption, then we need more awareness campaigns, health education, etc. in schools and communities that need it most.

    Prof. Reich seems enchanted by the symbolism of what Measure D passing would stand for – a win for the People against Big Corporations, the official crowning of Berkeley as the Most Progressive City in America, etc. The opposition will try to use the symbolism of Freedom of Choice vs. Big Government, excessive regulation, etc. But if you just focus on the issue actually at hand, logic suggests that Measure D simply doesn’t make sense.

  11. D.D. suggests that soda is a scapegoat here and that drinking soda poses no harm to other human beings. I feel certain that the anti-science, pro-business lobby will do their best to prevent a determination and publication of the truth in that regard. There is too much money to be made in food and beverage (e.g. Coca-cola alone: in 2013 1.8 billion servings per day) as well as drugs (insulin: estimated at $32 billion to $42 billion / year globally by 2018).

    It does not take a health scientist to see that obesity rates have risen dramatically in recent decades as we have adopted a “modern” diet and lifestyle and that obesity is increasing around the world as that diet (and lifestyle) is exported. However science is increasingly pointing out that consuming sugar, not fat, is behind the rise in obesity.

    There is also a societal cost to obesity in increased health-care costs ($190 billion in the USA 2005 alone), lost work days, decreased productivity. A libertarian might simply shrug and say make the people who are obese pay that price. Isn’t that what a soda tax does? (With the side-benefit of encouraging healthy behavior.)

  12. As someone who promotes and coaches clients on health, wellness and healthy dietary habits, I am 100% against the soda tax. I feel very strongly about this topic, and wanted to share with you some insight into the world of food taxing and why it is not an effective way to curb the obesity epidemic.

    In recent years, as recent as last month here in San Francisco, several cities have considered imposing a tax on soda (or pop, whatever you fancy). Large cities, such as Chicago and New York, also tried hopping on the bandwagon. The proposed tax in San Francisco would amount to an extra 24 cents per average 12-ounce (35 cl) can of soda. It would bring in an estimated $30 million in tax proceeds annually. It would apply to drinks with added sugar and at least 25 calories per ounce. Supporters of the tax argue (rightfully) that it offers no nutritional benefit, just a whopping 16 teaspoons of sugar in the average 20 ounce soda. Soda and its cohort of sugary beverages distinguish themselves as the single largest contributor of added calories to the American diet since the obesity crisis began some 30 years ago – responsible for more than 40 percent of those additional calories. The result of these extra calories? Obesity, diabetes, cancer, and exponentially high health care costs. I cannot argue these points, as they are all valid. But do I think a tax is going to solve these problems? Nope.

    First, the obesity problem is not solely caused by soda and sugary drinks. It’s also caused by candy bars, ice cream, fast food: our access to a plethora of processed foods has a much larger impact. To add to this impact is the fact that these items are all exponentially cheaper than whole, fresh foods. Since it would take a whole lot of lobbying (and a magic unicorn) to remove these items from our grocery store shelves, the focus should not be taxes, but education. If our government was smart, they would put more money towards education programs that aim toward teaching people how to make healthy food choices. If our government was smart, they would not propose a farm bill, which is to be signed this Friday by President Obama, that cuts funding for the Supplemental Nutrition Assistance Program, (which provides food stamps and health education to the poor) by $8.5 BILLION dollars.

    Second, “soda tax” is a misnomer because the tax would apply to a host of sugar-added drinks including juice, chocolate milk and coffee drinks. And restaurants and grocery stores will simply pass on the extra charge to consumers, perhaps by slightly raising all prices rather than specifically tacking on a fee to sugary drinks. This sounds like a business tax to me, which will be passed along, generally in higher food and beverage prices. Looks like no one wins here, no matter what you drink or eat.

    Third, let’s be real about who this tax will affect. Driving soda up a couple of dollars will not deter the middle and upper class from drinking it. I know several people who are addicted to Diet Coke, and everything be damned if they do not have their 3 cans each day. The only people this tax will hurt are the poor, for whom a few cents have greater impact. Just hear me out. Households who need food stamps just lost an average of $90 each month due to the 2014 farm bill. That is a lot of money. The poor, while yes can make a choice of how to use their food stamps, are often forced to buy high caloric, processed foods at a low price so they can get the calories they need to survive. Case in point: Lean Cuisines are about $3.00, and on average a bag of salad is about $4-$5…a whole meal vs. a bag of salad…not a difficult choice for someone who is extremely strapped for cash. The same can be said for soda. Currently, one can buy a Big Gulp at 7-11, that’s 64 ounces of soda, for under $2.00. It’s a very cheap way to consume calories. Are we seeing the pattern? Cheap food: No nutritional value, but this is the only choice the poor have. I know the argument could be made that “This is good! Now the poor will not have access to sugary drinks and will have less health problems.” When you have several mouths to feed on just a few dollars each week, I do not think obesity and diabetes are a main concern; instead it’s on how to eat and drink as many calories as possible with the very little money you have. If legislators are going to make it more difficult for poor people to buy “bad” food, they need to make it so more healthy food is more readily available and ensure education is at the tips of everyone’s fingers. This currently is not the case.

    Fourth, others have claimed that obesity—again, on the unlikely assumption that soda consumption is in fact an important cause of obesity—drives up taxes because it leads to increased expenditures for government-provided healthcare. However, there are problems with this line of reasoning as well.

    From http://taxfoundation.org/blog/case-against-soda-taxes-curb-obesity:

    “Many have claimed that drinking soda leads to obesity, and that the health risks associated with being overweight may drive up the price of health insurance. While this nutritional linkage is scientifically far from clear, even if it were true, this is clearly not a negative externality as understood by economists. Externalities are costs imposed by some party onto another outside the normal operation of the price system. If the rising demand for health care by obese people leads to rising health care prices, that isn’t an externality. That’s just a normal price change in the marketplace like any other.

    First, as with other health-influencing behaviors like smoking, if rising health expenditures due to obesity are counted as “negative externalities,” then for the calculation to be honest it must also include “positive externalities” associated with decreased life expectancy, such as reduced government expenditures on old-age related programs such as Social Security. Any legitimate measurement of the tax-related ‘externalities’ from obesity must account for both taxpayer losses and gains, and cannot simply total-up the costs alone.

    Second, not everyone who drinks soda, and thus who would pay a soda tax, ends up obese, making a broad excise tax on soda a blunt and inefficient mechanism for curbing obesity. If the true goal is weight reduction, there are more direct means of achieving that than a poorly targeted excise tax on certain politically unpopular products or industries.

    As with many attempts to achieve broader social goals through the tax system—as opposed to simply raising revenue efficiently for programs—a soda tax aimed at curbing obesity is not designed with any economic rationale in mind. Instead, it appeals to a paternalistic desire to control individual behavior in society, and treats the tax system as merely a convenient mechanism to achieve that
    end.”

    http://missfitblogger.com/2014/02/05/why-i-am-against-the-soda-pop-tax/

  13. Thanks for speaking out on this issue, and for tying it to the Free Speech Movement. The differences between then and now are indeed striking, but I hope the Berkeley spirit will prevail and give other cities confidence to try to beat Big Soda too.

  14. All signs are, unfortunately, that soda is just the latest handy scapegoat for obesity, which increasingly appears to be a highly complex problem covering biological . People like simple, pat answers that fall easily within their understanding and make them feel like they’re fully in control of their health, particularly if the solution happens to align with their existing preferences. The proponents of each theory insist that if the West would simply make that one little change they champion, the population would be svelte again.

    It doesn’t make a great deal of sense to compare drinking soda to smoking tobacco products, beyond being a clever appeal to emotions. Smoking a single cigarette damages the throat & lungs, unquestionably linked to respiratory cancers, and “secondhand” smoke damages the lungs even more severely, and can cause vicious headaches or even potentially deadly asthma attacks. Unlike with sodas, there are no brands or types of cigarettes that lack problematic chemicals (that I’m aware of as a non-smoker).

    That harm isn’t done to other living beings is a major reason that so few people are going along with the anti-soda campaigns, particularly if the individual doesn’t have a weight problem. Using financial aversives to push a person toward healthy behavior then brings up the crucial question of who decides which behaviors are or aren’t acceptable, and which metrics they use to do it.

    Penalizing somebody for having a Coca-Cola, but allowing their neighbor to binge-eat ‘comfort’ foods full of salts, fats and sugar after a large greasy pizza isn’t logical or fair. Worse, this would have to become a classic slippery-slope situation: if we’re no longer trusted to make our own dietary choices regarding soda without financial coercion, there’s little chance that we’d continue to be trusted to make decisions regarding far more important physical matters like when or whether to reproduce.

  15. No, it’s Berkeley vs. the citizens who might want to drink sugar soda. It’s their behavior, not that of the producers, that you intend to modify, and they who will pay the taxes.

    What would Mario Savio have done if you’d told him he couldn’t have a Coke?

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